Valuing time

I’ve previously mentioned using your hourly wage as a quick and dirty way to evaluate whether something is worth spending your time on. In a serious discussion this would be highly conditional1, but I’ll stand by the assertion that making a minimal effort to put things in perspective can help you lead a fuller life.

Working hard

Yet for those of us who have semi-concrete plans for the future, I don’t think current wages are the best choice (even for a rough measure). My thinking goes like this: Let’s say I intend to get a degree in medicine and become a neurosurgeon. We’ll also assume that this goal is not totally unrealistic, and that there’s a more or less well-known set of challenges I need to overcome to make it a reality. In that case, it’s safe to say that if I don’t fuck around I could become a neurosurgeon within a number of years, which would coincidentally include being paid as a neurosurgeon (~$400,000/year starting out).

From that point on I’ll be earning at this level (or higher) until some age of retirement or death, let’s say 62 (this timeline being true whether or not I become a surgeon). So assuming that I really do want this vocation, I could see my professional career as a phase leading up to this accomplishment, followed by a phase as a surgeon. Since the end point for the latter phase is fixed, every hour added to the first phase costs me (over the course of my career) not what I could be making right now, but the hourly wage as a surgeon (~$200). Would you hit the library instead of watching a movie if someone was paying you three hundred dollars to do so?2

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Of course this doesn’t apply if you’re struggling to fund your basic needs, in which case your horizon needs to be much shorter (a good example of the ephemeral value of a dollar). And it’s mainly relevant when your goals would generate paychecks. But just as importantly, the reasoning only works if we actually dedicate all our free time to whatever our goal is. For this reason the time valuation model presented here might not be immediately useful for most of us, either because we don’t have a clear goal or because we’re unwilling to pursue it wholeheartedly. In the former case these cogitations have nothing to offer, except perhaps the realization that the value of time saved strongly depends on having something you want to spend it on3. But in the latter case, perhaps calculating the value of your time as I’ve suggested might help put the consequences of such an unwillingness into perspective (at least a narrow-mindedly economical perspective).


[1] For one thing, it’s obvious that not every cost/reward can easily be converted into dollars. And in any case the value of a dollar depends on how many of them you already have, as well as the amount of dollars that would be required to achieve all of your goals.

[2] Realistically I doubt we’ll be able to utilize present time to bring our goals closer with perfect efficiency. But even at e.g. 50% efficiency the neurosurgeon example would value your time at $100/hour.

[3] Which might not be totally useless for a culture obsessed with convenience. Do you need a bread machine if you’ll end up watching TV instead of baking? I suppose, if whatever you watch is more valuable than learning to make bread. Do you need to do cardio at the gym if you have a bike and there’s a shower at work? I suppose, if work is more than 5 miles away…

Lavin Mixed Martial Arts & Fitness

When I’m not doing martial arts regularly I feel like something’s wrong. Why that is might be the subject of a future post, but for now I’m thankful that it isn’t going to happen anytime soon. Or, to put it differently, I love my gym.

GeometricBJJ

The indispensable reason is that John Lavin is really really good. It’s not always obvious how well a teacher knows his stuff, but when he holds the state championship from both the North American Grappling Association and the United Grappling Federation you know he’s legit. And it’s not just him either. SAMBO coach? Trained in Russia, bunch of medals. Muay Thai coach? Trained in Thailand, bunch of medals. And so on.

When I first looked at Lavin Mixed Martial Arts & Fitness I thought it was pretty expensive ($165/month for full access), but fortunately John lets you train free for the first month. So I started showing up and after less than two weeks I was sure that I’d happily pay that price. In fact, after further consideration I don’t consider it expensive. Why? I could paraphrase Edward Smith-Stanley and say “Those who think they cannot afford bodily exercise will sooner or later have to afford illness”. But that’s not really the reason. Slightly off-topic, saying that you’re in bad shape because you can’t afford the gym is a terrible excuse when there are free exercise opportunities all around. Doing anything demanding every day is the best training program in the world; if you don’t believe me, go arm-wrestle a farmer. And if you really want a planned-out program, make a $12 down payment and pay your installments in willpower.

MMA fit

The real reasons all hinge on what the basis for comparison is. First off, I know that the fees aren’t high so that John can get rich. In addition to paying rent for the really nice facility, he’s paying for gloves, shin guards and helmets, bags and mitts, weights and other workout gear, not to mention salaries. And at the end of the day he still has to pay all his own expenses. So yeah, it costs four times as much as 24 Hour Fitness, but what that place does is rent out treadmills to people who don’t show up much. That’s like comparing fish fingers with sushi: Yes, they’re both food containing fish, but one requires years of training while the other could be done by a monkey with a deep fryer. If we change our perspective a bit, what I’m really paying for is that someone who has spent fifteen years studying something teaches me what he knows. Is it expensive? If I go for four years I’d have paid about $8,000, and would probably have gotten pretty good at mixed martial arts. Did you go to college? If you did, chances are that you (or your parents) paid something like 20k per year, or $80,000 total, for you to get pretty good at something. Sure, you also get a piece of paper that might get you a job, but is that why you did it? If so you might have gotten the same results for free through apprenticeship. But if not, you paid for people with 10-30 years of experience to teach you something you (hopefully) wanted to learn.

Whether grappling is as important to learn as articulation and source criticism is for each of us to decide. But my point is that if we compare gym fees to an equivalent service rather than to other everyday expenses, it’s not expensive. And that’s without the free perks: I was having neck pains for a while, partly from work and partly from wrestling, but on John’s recommendation I bought a buckwheat pillow that helped a ton. When I’m early and catch the tail end of a kid’s class, I’ve noticed that John takes time out to teach the kids life lessons. I randomly picked up a book from his lending library, which ended up making a big impression on me. And you get access to a great guy with an encyclopedic knowledge of Prince logo.svg and a number of almost-but-not-quite ridiculous movie script ideas.

Lavin MMA

Overlooked wisdom

When (and where) my parents were young, the concept of money was pretty uncool. Changing the world was cool, doing interesting things was cool, and (most of all, I suspect) being cool was cool. So that’s what they internalized, and of course it rubbed off. Although I somehow ended up quite frugal, making money never ranked high amongst my goals. And since all I knew about Warren Buffett was that he was one of the world’s richest men, I never paid any attention to him (or Charlie Munger).

Munger & Buffett

From experience, I would say that this kind of dismissal is not too uncommon. Maybe you want to know about success, but since you care more about your art than about money you instead go read what Baryshnikov has to say on the matter. Or maybe in your artistic circles the name Buffett just never came up (at least in that context).

But this post is not about Warren Buffett being overlooked. Rather, it’s the idea that there’s a lot of overlooked wisdom in the world, a lot of insight that goes unnoticed by most people because it’s normally associated with a specific area of interest. But the thing is that the wisdom can often be useful outside of that area. The understanding that made Buffett and Munger billionaires through investing can easily find application in other parts of life. Here is a quote from each of them, by way of illustration.

Munger:

It’s not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it — who look and sift the world for a mispriced bet — that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t. It’s just that simple.

Buffett:

No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.

 

If we looked at the people who are most successful in various fields, we might find that they have more in common with each other than with the average person in their field. So is it very incredible that we could learn from the leader of a drastically different field? To reverse the artist example above, an avid investor might well have gorged himself on anything written by or on Warren Buffett. But after he has exhausted the shrewdest works of his field, wouldn’t you expect him to receive diminishing returns? At what point would he gain more (even strictly in terms of investing) from reading Seneca or science fiction than another second-hand analysis of Warren Buffett?


Another recent example of this came when I picked up an autobiography from UFC champion Georges St. Pierre. To be honest I wasn’t expecting much: some ghostwritten recap of his awesomeness, designed to extract dollars from existing fans. But I was then quite absorbed by mixed martial arts, and grabbed it on a whim.

Georges St. PierreWhich is fortunate, because it turned out to be a very insightful description of the story behind success. Of the mentality required not just to to undergo ridiculous training regimens, but to do so with complete focus and vision to ensure constant growth. Of psychological pitfalls, and why cockroaches are more impressive than a Tyrannosaurus Rex. And, most notably, of the sacrifices that any wholehearted pursuit of greatness entails.

Some biographies make it seem that champions (in whatever field) lead an essentially normal life but just happen to be magically better than everyone else. Which, to me, is total bullshit. You can be good at many things, but if you want to be better than everyone else in the world you have to step beyond the normal. And at that point something has to give, be that personal relationships or other interests. I had never before read so forthright an account of this, and although the book’s other lessons were not quite as edifying, I did feel that almost all of them could be directly applied to a career in science. A few example quotes:

On innovation, the most important trait for a would-be champion:

Very often, we see leaders lose sight of how they got to where they are: by being and thinking differently from the competition. They make it to first place, and then their thinking changes from seeking innovation to seeking the status quo. They think, I made it to first place, so now I must not change a thing. But change is what got them to the top in the first place! This is because they’re focused on the positive result rather than on the process of success.

On discipline, and self-honesty:

The real test is this one: When you’re alone in a room, when you’re in a private place and nobody else can see you, what do you choose to do? Eat well, or eat poorly? Exercise, or watch television?

On (necessary) sacrifices:

There is no such thing as a normal friendship in my life … I look at the people who are close to me, the ones I refer to as friends, and I wonder: Will I ever have a relationship like his? Will I ever achieve marriage, children, family? Will I ever own a barbecue or have dishes in my cupboards or live life according to the rules that govern masses of individuals?..

If any of this rings true, I heartily recommend reading The Way of the Fight.

Commonly perceived goods

Last Christmas a coworker asked me if I was going home for the holidays. I wasn’t, and moreover I was pretty happy with that: I preferred to get things rolling in my new occupation before taking a vacation. But saying so felt a bit weird (for both of us): I would rather work than celebrate Christmas with my family? Am I a mentally warped career-slave?

Christmas in LA

As a counterpoint, I feel that I have a very positive relationship with my parents. I talk to them once or twice a week, and they are the first people I go to when something significant (positive or negative) happens in my life. I didn’t move out upon turning eighteen because I was happy being close to them. I’m thrilled at the upbringing they’ve provided and one of the items on my last ‘5-year goals’ was “make sure parents feel fully appreciated”. So it’s not ‘home’ that fails to out-compete labwork, which immediately suggests that it is ‘Christmas’.

Christmas hasn’t been a huge deal in my immediate family, at least not since most of my grandparents died. For several years now we haven’t even had a tree. Nonetheless, (more or less) disregarding Christmas is a bit of a step, even for me. But in trying to figure out why, I realized something about the things that I unexpectedly enjoy (or don’t enjoy) doing.

It all boils down to whether Christmas with family isn’t what I will dub a ‘commonly perceived good’. A prime example of this concept would be sipping a cocktail on a paradisaical beach somewhere. If you posted this on Facebook, many people would likely express feelings of jealousy. In fact, much of what we post on Facebook are things that will be generally accepted as ‘good’, so as to boost perception of our online persona (and, by extension, our self-esteem). It is less common to post pictures of yourself playing a role-playing game, or of a whiteboard filled with ideas you have for knitting a scarf. Even though these things might be more rewarding to you than sitting on the beach. And while the ‘commonly perceived goods’ certainly are nice, they’re not necessarily how you would MOST like to spend your time. Therein lies their insidiousness: they’re not bad per se, so it’s hard to argue for why you would willingly avoid them.

A commonly perceived good

Social dogma kind of hints that they are the best thing that could possibly happen to us. Certainly isn’t for me. Admittedly I’m a hyperactive productivity addict, but that’s not a good counter-argument: I am who I am (and my parents largely made me that), and why shouldn’t I do what is most rewarding? By doing the alternative I am letting external forces govern my life, at the cost of my happiness. And not the undeniable kind of external forces that will really mess you up if you ignore them (like war or hunger), but an illusory kind that only has whatever power you (and those around you) grant them. I’m not trying to make the commonly perceived goods out to be loathsome; the reason they are ‘commonly perceived’ is that a lot of people find value in them. All I’m saying is that when you get a memo from that most honest part of your gut, saying that you’d really rather be doing something else, just ignore that what you’re currently doing is ‘supposed to be’ great.

So yeah, I kind of skipped Christmas. On reflection this let me work on all the things I was working on, and thus made me happy. And maybe more successful. If Christmas was a huge deal to my parents I would certainly have factored that into the considerations; but instead they visited here for Easter, and we had a great time. Being pragmatic is not necessarily the best choice in every situation, as there can certainly be value in traditions. But it doesn’t have to be the same traditions as everyone else has.


Thanks to Joana Neves for the innocuous question that spawned this post.

Opportunity cost

One Sunday each quarter, the California Academy of Sciences is free to visit.

California Academy of Sciences Rainforest

Or is it?

You don’t have to pay for admission, true. But since the event is both infrequent and well-known you’ll need to wait in line for, say, an hour and a half, even if you show up before they open the doors. How much do you make per hour (after tax)? If more than $20, one could argue that you’re losing money by standing in line instead of just paying $35 for entrance on a less crowded day.

Of course it’s not quite that simple; many people couldn’t simply work 1.5 hours more if they needed extra cash. And you might have been having fun with your friends while waiting. Though on the other hand the crowding doesn’t end once you get inside, so arguably your experience of the museum is inferior as well. But the point is that we ought not to compare expenses of time/money to doing nothing, but rather to what we could have spent it on instead.

The term used to describe this in economics is opportunity cost, as in the value of the opportunity you gave up through a given choice. And the concept is particularly important in situations like the above where the explicit cost of a choice is zero. You may have heard the phrase “There ain’t no such thing as a free lunch” from either Milton Friedman or Robert A. Heinlein, and the point is that there is an opportunity cost to everything.

The clearest example of opportunity cost might be a game show where you give up a sure reward for the chance at a larger reward. The choice to gamble isn’t free, because if you’d declined you would have gained something. And the same principle holds throughout our actual lives: Going to the movies doesn’t cost $12, but $12 plus two hours that you could have spent reading a book or learning web design. Eating dinner at Chipotle doesn’t cost $8, but $8 minus whatever you would have spent to cook at home (assuming you’re not skipping dinner). A free chair on craigslist will still cost you gas to pick up.

Of course it’s possible to get a bit carried away: I’ve heard it said that we shouldn’t ever do something if someone else can do it for less than we make per hour. Sure, specialization is a foundation of modern society, but if you only have a single skill you’d better hope that demand for it never drops. And it would be naive to imagine that we could actually calculate the precise opportunity cost of anything when the “cost” could include anything from hormonal imbalance to the respect of others. Nevertheless, I don’t think the importance of understanding opportunity cost can be overstated if you want to efficiently pursue your life goals, whatever they may be.


Thanks to Johan Larsson for engendering this post with a question about opportunity cost.

 

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